Can you use your provident fund to pay for your home loan? The answer is yes, now you can. With the introduction of new Provident fund housing scheme, people can use utilize their retirement funds as down-payment for their home loan in EPFO Housing Scheme . The main question is whether or not it is wise to use the provident fund which is your secured fund to serve you after retirement.
EPFO Housing Scheme 2022
All the questions related to the scheme will be answered in this article. Read the article till end to have more information bout provident fund housing scheme. More about EPFO Housing Scheme 2022 – EPF stands for employees’ provident fund. The fund is for the employees to serve them after retirement. According to the rules of employees’ provident fund, they are not allowed to withdraw money from their provident account.
There are criteria and rules for the withdrawal of money from employees’ provident fund. The employees’ provident fund advance form is also known as form 31. Buying a house is not very convenient any more. There is tedious paperwork involved. Banks who provide house loans demand for 20% down payment from the buyers. Large portion of the loan and interest is gone from buyer’s pocket.
EPFO Housing Loan Apply online
The legal formalities and paper work will cost 10% of the total cost of property to be settled. The legal formalities include registration, stamp paper, payment and more. People who want to buy house quickly can withdraw from their provident fund. Withdrawing from provident fund is both convenient and easy.
What are employees’ provident fund?
Employees’ provident fund is a retirement-investment and saving scheme for the employees of certain organisations. The scheme is mandatory for the employees and the organisations. Under the scheme, employees have to contribute 12% of their basic salary towards provident fund. This will help the employees to save certain amount of money in their provident account, which can be partially withdrawn for certain purposes. The withdrawal of money from provident fund is subject to conditions and restrictions laid down by law.
EPFO Housing Loan Interest Rate
Employees’ provident fund housing scheme
Home purchases are not easy and are often out of pocket for many people. Therefore, the central government has launched few measures and schemes that will make home buying easier and more convenient. EPFO housing scheme was launched in 2017. EPFO refers to employees’ provident fund organisation. According to the scheme, employees can also use their provident fund accumulation to make down payment for their house or to pay the house loan EMI’s. EPFO is accessible to every employee whether they work in private sector or public sector.
|Scheme||EPFO Housing Scheme|
|Under||Ministry of Labour & Employment, Govt of India|
|Apply||EPFO Housing Scheme Form 2022|
|Status||EPFO Housing Scheme Status 2022|
EPFO is government run organisation and all the employees or people who contribute to the scheme are considered as members of the scheme. There are various other benefits that can be availed by the members of EPFO home scheme.
How to use EPF money?
There are various purposes for which employees’ provident fund can be used for. Some of the purposes are as under-
- Education (limit is up to 50%)
- Marriage (withdrawal limit up to 50% of employee’s contribution)
- Land purchase or house purchase
- Home renovation
- Loan repayment
- Before retirement (withdrawal limit up to 90% accumulated funds)
- Other special cases
EPFO Housing Loan Application Form 2022
The money form provident fund can be withdrawn by the member to purchase land, build house or construct a property, home renovation and more. The condition to withdraw money for these purposes are that the land should be owned by the PDF account holder or his or her spouse. If the property is owned by the PF holder along with someone else other than his or her spouse, he or she is not eligible for the withdrawal from their PF account.
Withdrawal rules of EPF
There are various withdrawal conditions that have been imposed for the withdrawal of money from provident fund account since 2017. Another condition has allowed the Provident fund holders to withdraw 90% of their accumulated funds from PF account to purchase home.
Other withdrawal conditions are as under-
- The provident fund holder should be a member of registered housing society, consisting of 10 members. Therefore, if a person wants to apply for withdrawal from provident fund, he should be a member of registered housing society.
- On the date of application, total balance in the account of the provident fund holder or his spouse should be 20,000 Rs.
- Only 90% of the total accumulated funds can be withdrawn from PF. This withdrawal can only be allowed only once.
- Before 2017, the provident fund holders were required to be members of registered housing society for more than 5 years in order to withdraw money from provident fund to buy home.
- The withdrawal to limited to amount equal to 36 months of base salary and dearness allowance of the holder.
- To buy a plot, the withdrawal limit was 24 months’ base salary and dearness allowance.
- To renovate the existing property, the withdrawal limit was base salary of 12 months and dearness allowance.
EPFO Housing Loan Withdraw process
Procedure to withdraw money from provident fund account
To withdraw the money from provident fund account, the holder or the spouse of the holder should be a member of registered housing society. The member will have to submit the application for withdrawal of money through online or offline form. For online application, the UAN or universal account number of the member or his spouse should be linked with Aadhar card, PAN and bank details. The loan is applied through housing society online. The member will have to apply for loan to EPF commissioner in the format as specified in Annexure 1 on EPFO website.
The member will have to provide his balance and payment details for the past three months. The details of the housing society to which the payment is being made is also mentioned in the form.
The payment for the loan will be directly provided in the bank account of the housing society. The member can also choose between lump sum payment or EMI’s payment for the loan. Members who are applying for PF withdrawal to pay home loan EMI’s will have to fill annexure 3 along with Annexure 1.